Monday, August 23, 2010

Never one to look at the science that OPPOSES his big push on man-made global warming, former VP Al Gore continues to whine and blame everybody else (the U.S. Senate, the right-wing media, "professional deniers") for the fact that not ALL science backs up his bizarre beliefs. He says, "The battle is not over."

Oh really?

Gore Concedes on Climate This Year

Speaking about the likelihood of climate bill being passed by Congress in 2010, Al Gore told a conference call of supporters tonight that, “this battle has not been successful and is pretty much over for this year.” Gore bitterly denounced the Senate and federal government stating several times, “The U.S. Senate has failed us” and “The federal government has failed us.” Gore even seemed to blame President Obama by emphasizing that “the government as a whole has failed us… although the House did its job. [emphasis added]”

Gored urged his listeners to take the “realistic view that they had failed badly.” Gore said that “Comprehensive legislation is not likely to be debated” and that a “lame duck debate” is a “very slim possibility indeed.” (N.B. We thought, because Gore told us, that “the debate” was over.)

Gore said “the government was not working “as our founders intended it to” and laid more blame at the feet of fossil fuel interests who conducted a “cynical coordinated campaign” with “unprecedented funding” and “who have spent hundreds of millions of dollars just on lobbying.” He criticized “polluters” for “dumping global warming pollution into the atmosphere like it was an open sewer.”

Asked why the alarmists were ineffective in addressing Climategate, Gore bitterly blamed a “biased right-wing media… bolstered by professional deniers.” Gore claimed the Wall Street Journal published 30 editorial and news articles about Climategate and “not a single one presented [his] side of the science.”

Speaking about the post-2010 prospects for a climate bill, Gore tried to boost morale by stating that “the battle is not over” and that “we [alarmists] have no choice but to win the battle.” Gore said that “reality is [the alarmists] ally” and then, among other things, blamed recent flooding in Nashville and the Russian heatwave/forest fires on global warming.

He concluded by observing that “it is darkest before dawn” and “we have not yet begun to fight.”

In a warm-up discussion before Gore addressed the call, National Wildlife Federation chief Larry Schweiger referred to the skeptics as “enemies” and that he hoped the alarmists would “outlive the bastards.”

Saturday, August 21, 2010

The off-shore drilling moratorium, the proposed cap & trade taxes, (or shall we say the energy penalty for being American?), and the continued, unsubstantiated claims of man-made global warming...we Americans need to know the truth about what all this will cost each and every one of us every day.

With more than 14 million Americans unemployed today, can you imagine what $7 per gallon gas will do to the economy?

We're not lucky enough to travel on Air Force One (or Two for a luxury vacation in Spain), or chopper six miles on Marine One to speak about how the economy continues to crash...we just pay for those flights. That's in addition to filling our own gas tanks to get to work if we HAVE a job. You get the drift.

If you had any questions about the existence of global warming, and whether it's YOUR fault, take a look at THIS...

It’s a Desperate Time for the Global Warming CampaignersJames Hansen of NASA, an ardent believer in man-made warming, announced recently that “The 12-month running mean global temperature in the Goddard Space Institute analysis has reached a new record in 2010 . . . NASA, June 3, 2010. The main factor is our estimated temperature change for the Arctic region.” The GISS figures show that recent temperatures in the Arctic have been up to four degrees C warmer than the long-term mean.

Should we be alarmed? Probably not very.

My esteemed colleague Art Horn, at the Energy Tribune blog, has blown the whistle on Hansen and GISS. He points out that GISS has no thermometers in the Arctic! It has hardly any thermometers that are even near the Arctic Circle. GISS estimates its arctic temperatures from land-based thermometers that supposedly each represent the temperatures over 1200 square kilometers. That’s a pretty heroic assumption.

Meanwhile, the Danish Meteorological Institute is publishing sea-surface temperatures from the Arctic showing a cooling trend in the Arctic oceans during melt season since about 1993. Clearly, we have no accurate measure of the real temperatures and trends in the Arctic at this moment. Probably that’s not very important. The Russians say that the Arctic has its own 70-year climate cycle. The files of the New York Times, in fact, are filled with stories from the 1920s and 1930s, clearly showing that the Arctic was as warm then as now.

But this is the moment when proposed energy taxes would start to scuttle 85 percent of the energy which powers the modern world and its lifestyles. Global climate alarmists, Hansen among them, are playing a desperate and short-sighted game of “pass the energy taxes.”

President Obama says energy taxes are a high priority—perhaps high enough to ramp up his “health care reform” strategy. In a lame-duck Congressional session, after the November elections, Congress persons who had already lost their seats, would vote to saddle America with energy taxes that would triple our electric bills and, according to a Harvard study, drive gas prices to $7 per gallon.

The energy taxes are intended to make fossil fuels expensive! The idea is to deliberately drive fossil fuel prices high enough to force us to stop using them. Then we’re supposed to depend on costly and erratic solar and wind power. (Biomass can never produce much energy: biofuel crops would take too much land, and we can’t make ethanol out of cellulose sources.)

The man-made global warming believers have invested 20 years in their campaign to convince us of CO2-driven climate calamity. To their chagrin, the earth’s temperatures started to trend downward in 2007.

The sunspot index, which has a much stronger correlation with our thermometer record than CO2 (79% versus 22%) started predicting the cooling in 2000. The sun is still in a long cold-predicting minimum.

In 2008, NASA itself told us that Pacific had shifted into its cooling mode. The history of the Pacific Decadal Oscillation indicates a 30-year cooling phase, the opposite of the 1976–1998 warming trend.

They’re panicked about losing the whole ball game. They feel they must get an energy tax on the books before the earth has a chance to resume the recent-and-predicted cooling trend. They imagine that if the law gets on the books, a restart of the cooling wouldn’t push the next Congress to repeal the energy tax!

They might even be right, though it seems a stretch given the American people’s already-massive Obama-debt and the demonstrated history that tax cuts grow the economy and tax increases strangle it.

It’s a desperate time, not for the earth, but for the global warming campaigners.

Wednesday, August 11, 2010

With all the talk about “renewable” energy, have you wondered what happened to ethanol? Touted as the energy savior during the Bush administration, we don’t even hear a whimper about it under Obama’s leadership. It seemed to just go away.

But it’s baaack.

Read what CARE Energy Council Member Paul Driessen has to say about ethanol. We believe you’ll be shocked and outraged at what has been quietly happening behind the scenes while all the talk centers around wind and solar. Surprise: if these plans go through, energy will cost all of us more!

Dumb energy policies just keep comingE15 ethanol mandates would bring huge benefits – for the few, at the expense of the manyIf 10% ethanol in gasoline is good, 15% (E15) will be even better. At least for some folks.

We’re certainly heading in that direction--thanks to animosity toward oil, natural gas and coal, fear-mongering about global warming, and superlative lobbying for “alternative,” “affordable,” “eco-friendly” biofuels. Whether the trend continues, and what unintended consequences will be unleashed, will depend on Corn Belt versus consumer politics and whether more people recognize the downsides of ethanol.

Federal laws currently require that fuel suppliers blend more and more ethanol into gasoline, until the annual total rises from 9 billion gallons of EtOH in 2008 to 36 billion in 2022. The national Renewable Fuel Standard (RFS) also mandates that corn-based ethanol tops out at 15 billion gallons a year, and the rest comes from “advanced biofuels”--fuels produced from switchgrass, forest products and other non-corn feedstocks, and having 50% lower lifecycle greenhouse gas emissions than petroleum.

These “advanced biofuels” thus far exist only on paper or in laboratories and demonstration projects. But Congress apparently believes passing a law will turn wishes into horses and mandates into reality.

Create the demand, say ethanol activists, and the supply will follow. In plain-spoken English: Impose the mandates and provide sufficient subsidies, and ethanol producers will gladly “earn” billions growing crops, building facilities and distilling fuel.

Thus, ADM, Cargill, POET bio-energy and the Growth Energy coalition will benefit from RFS and other mandates, loan guarantees, tax credits and direct subsidies. Automobile and other manufacturers will sell new lines of vehicles and equipment to replace soon-to-be-obsolete models that cannot handle E15 blends. Lawmakers who nourish the arrangement will continue receiving hefty campaign contributions from Big Farma.

However, voter anger over subsidies and deficits bode ill for the status quo. So POET doubled its Capital Hill lobbying budget in 2010, and the ethanol industry has launched a full-court press to have the Senate, Congress and Environmental Protection Agency raise the ethanol-in-gasoline limit to 15% ASAP. As their anxiety levels have risen, some lobbyists are suggesting a compromise at 12% (E12).

Not surprisingly, ethanol activism is resisted by people on the other side of the ledger--those who will pay the tab, and those who worry about the environmental impacts of ethanol production and use.

Taxpayer and free market advocates point to the billions being transferred from one class of citizens to another, while legislators and regulators lock up billions of barrels of oil, trillions of cubic feet of natural gas, and vast additional energy resources in onshore and offshore America. They note that ethanol costs 3.5 times as much as gasoline to produce, but contains only 65% as much energy per gallon as gasoline.

Motorists, boaters, snowmobilers and outdoor power equipment users worry about safety and cost. The more ethanol there is in gasoline, the more often consumers have to fill up their tanks, the less value they get, and the more they must deal with repairs, replacements, lost earnings and productivity, and malfunctions that are inconvenient or even dangerous.

Ethanol burns hotter than gasoline. It collects water and corrodes plastic,rubber and soft metal parts. Older engines and systems may not be able to handleE15 or even E12, which could also increase emissions and adversely affectengine, fuel pump and sensor durability.

Home owners, landscapers and yard care workers who use 200 million lawn mowers, chainsaws, trimmers, blowers and other outdoor power gear want proof that parts won’t deteriorate and equipment won’t stall out, start inadvertently or catch fire. Drivers want proof that their car or motorcycle won’t conk out on congested highways or in the middle of nowhere, boat engines won’t die miles from land or in the face of a storm, and snowmobiles won’t sputter to a stop in some frigid wilderness.

All these people have a simple request: test E12 and E15 blends first. Wait until the Department of Energy and private sector assess these risks sufficiently, and issue a clean bill of health, before imposing new fuel standards. Safety first. Working stiff livelihoods second. Bigger profits for Big Farma and Mega Ethanol can wait. Some unexpected parties recently offered their support for more testing.

Whether the issue is food, vehicles or equipment, blue collar, minority, elderly and middle class families would be disproportionately affected, Affordable Power Alliance co-chairman Harry Jackson, Jr. points out. They have to pay a larger portion of their smaller incomes for food, and own older cars and power equipment that would be particularly vulnerable to E15 fuels.

Ethanol mandates also drive up the cost of food aid – so fewer malnourished, destitute people can be fed via USAID and World Food Organization programs.Biotechnology will certainly help, by enabling farmers to produce more biofuel crops per acre, using fewer pesticides and utilizing no-till methods that reduce soil erosion, even under drought conditions. If only Greenpeace and other radical groups would cease battling this technology. However, there are legitimate environmental concerns.

Oil, gas, coal and uranium extraction produces large quantities of high-density fuel for vehicles, equipment and power plants (to recharge batteries) from relatively small tracts of land. We could produce 670 billion gallons of oil from Arctic land equal to 1/20 of Washington, DC, if ANWR weren’t off limits.

By contrast, 15 billion gallons of corn-based ethanol requires cropland andwildlife habitat the size of Georgia, and for 21 billion gallons of advancedbiofuel we’d need South Carolina planted in switchgrass.

Ethanol has only two-thirds the energy value of gasoline--and it takes 70% more energy to grow and harvest corn and turn it into EtOH than what it yields as a fuel. There is a “net energy loss,” says Cornell University agriculture professor David Pimental.

Pimental and other analysts also calculate that growing and processing corn into ethanol requires over 8,000 gallons of water per gallon of alcohol fuel. Much of the water comes from already stressed aquifers--and growing the crops results in significant pesticide, herbicide and fertilizer runoff.

Ethanol blends do little to reduce smog, and in fact result in more pollutants evaporating from gas tanks, says the National Academy of Sciences. As to preventing climate change, thousands of scientists doubt the human role, climate “crisis” claims and efficacy of biofuels in addressing the speculative problem.

Meanwhile, Congress remains intent on mandating low-water toilets and washing machines, and steadily expanding ethanol diktats. And EPA wants to crack down on dust from livestock, combine operations and tractors in farm fields.

“With Congress,” Will Rogers observed, “every time they make a joke it’s a law, and every time they make a law it’s a joke.” If it had been around in 1934, he would have added EPA. Let’s hope for some change.

Tuesday, August 10, 2010

We always enjoy featuring the insights of Byron King and have benefitted from his expertise on CARE’s Monthly Conference Call. This piece caught our attention because of the title. Of course the word ‘oil” was a trigger, but “crashing” was more the hook.

The debate about so-called “peak oil” is ongoing and we’ve generally taken the side of “Yes, the low hanging fruit is gone, but there are so many new discoveries and resource expansion that we have enough oil for a hundred years at least.” So, “crashing” definitely got our attention--hopefully yours too!

Fortunately, this piece didn’t change our view, but unfortunately for America, who uses a great deal of the Mexican resource, they have not managed their industry well. Byron writes for an investment newsletter called Whiskey and Gunpowder and while we do not even pretend to give investment advice, we always find his perspective worthy of note.

Mexico’s Crashing Oil IndustryMexico is a critical oil supplier to the United States. But Mexico’s ‘s oil industry is in crisis. Indeed the grim numbers come from no less a source than the Mexican Energy Ministry. Production statistics make it clear that Mexico’s overall oil output is declining rapidly--with the word “crashing” coming to mind as one views the chart.

One particular oil field is central to the problem. It’s called Cantarell. It’s a super-giant, offshore oil field that was discovered in 1976--based on a natural oil seep under about 150 feet of water, by the way.

After decades of production, Cantarell is getting long in the tooth. Oil output from Cantarell, is declining rapidly. Cantarell is depleting at an astonishing rate. Meanwhile, the yield from new Mexican oil fields is simply not making up the difference.

The Mexican government obtains about 40% of its national receipts from oil-related revenues. Yet due to falling oil output, especially from offshore, Mexico will likely cease being an oil exporting nation by 2015. This looming problem holds dire implications for the national balance sheet of Mexico, as well as--by implication--for U.S. energy and national security.

One obvious question is, Can Mexico rebuild its oil industry? Right now, there’s not nearly enough internal Mexican investment in exploration and new oil development. It’s quite evident that Mexico has under-funded what’s called “maintenance capital,” the funds necessary just to keep the day-to-day operations and equipment working.

Another problem is Mexico’s lack of success in discovering and developing new oil resources, despite its national jurisdiction over a large slice of the oil-rich Gulf of Mexico.

One major element of this lack of exploration success is that Mexico’s constitution severely restricts foreign participation in Mexico’s energy development. That is, foreign oil companies are banned from exploring for and drilling for oil in Mexico. Considering Mexico’s crashing oil output, it’s fair to ask if Mexico should change its approach to development.

Recently, I discussed these important issues with Ali Moshiri, President of Chevron Africa and Latin America Exploration and Production Company.

Here’s what I asked Mr. Moshiri about Mexican oil development, followed by his reply.

BWK: In the U.S. we’re seeing remarkable discoveries in the deepwater Gulf of Mexico (GOM). Could you share your views about what’s happening across the GOM, down in Mexico? Is there hope for deepwater oil helping Mexico reverse it’s decline rate for oil production?

AM:With Mexico, the new government reforms are in a positive direction. The fundamentals have to be decided by the Mexican government, which has to decide how they want to risk exploring their basin.

The Mexican government has to decide if they want to risk future exploration via Pemex (Petroleos Mexicanos, the Mexican national oil company--NOC), or via the private sector. They need to recognize that if the private sector is going to get involved, it has to be via a meaningful way. A meaningful way would be via sharing the risk and the upside.

BWK: Do you think we’ll ever see large, new discoveries in the Mexican GOM areas?

AM:I personally believe that Mexico is under-explored. They’re lagging behind on exploration offshore, and they underestimate the complexity and what is required. It all needs to be reassessed.If you look at the U.S. deepwater GOM, there was a long era (to get to) where we are today. And you cannot look at today, and say you are going to take the U.S. GOM and image it into the Mexican area.

BWK: So what do you think it will take for Mexico to accomplish the exploration, and find the potential resources that are out there?

AM:Number one is that (Mexico needs to allow) the flexibility that is required for private sector, for IOCs (international oil companies). It’s IOCs that are the ones who really know how to go from phased exploration into development.

Yes, you can find companies that can explore. But when you explore, and then you find hydrocarbons in 8,000 feet of water, the next step is how you can develop it. How much money do you need? You can say, well, you need X-millions of dollars (to) develop it. But how do I finance it?

It gets into capital efficiency. Capital efficiency would be, how do I go ahead and finance this project? By production sharing? Finance it by myself? Some other way? How do you finance the development? Those are things that we think need to be addressed in Mexico.

BWK: What about contractors? Do you think Mexico could accomplish its energy goals by hiring, say, service companies, or using large oil companies as contractors, to do the exploration, the seismic, the drilling and such?

AM:The IOC has to be perceived as a partner. You cannot perceive the IOC as a contractor. This is my personal opinion.

Working with the IOC as purely a contractor will slow down the process. You have to look at the IOC as a partner, and a partner meaning sharing the risks as well as the rewards.

If Mexico gets this concept, and understands it, I think the progress and the basin is good enough to do things in the right way, and (Mexico) can be able to catch up the U.S. GOM and the U.S. sector.

So according to Chevron’s Ali Moshiri, there’s hope the Mexican energy sector. If Mexico opens up to foreign risk-sharing, and makes a good use of the expertise of international oil firms, then the nation can increase its future oil output.

But Mexico needs to permit outside, independent oil companies to participate as partners in exploration and development. That means to share the risk and rewards. In other words, Mexico should leverage foreign capital and technology, while sharing the eventual oil production in an equitable manner.

Even then, if everything goes right, it’s going to be a multi-year project to restore Mexico’s oil output to what we’ve seen in previous years. From where things are now, it won’t be easy.

Byron King earned his Juris Doctor from the University of Pittsburgh School of Law, graduated cum laude from Harvard University, served on the staff of the Chief of Naval Operations, and is a regulator contributor to the Whiskey and Gunpowder investment newsletter.

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Dennis T. Averyhas been quoted in publications ranging from Time and The Washington Post to The Farm Journal. His article, “What's Wrong with Global Warming?” was published in the August 1999 issue of Reader's Digest. With S. Fred Singer, Avery is the coauthor of Unstoppable Global Warming; Every 1500 Years. He travels the world as a speaker, has testified before Congress, and has appeared on most of the nation's major television networks, including a program discussing the bacterial dangers of organic foods on ABC's 20/20. Avery studied agricultural economics at Michigan State University and the University of Wisconsin. He holds awards for outstanding performance from three different government agencies and was awarded the National Intelligence Medal of Achievement in 1983. In addition to lending his expertise to CARE as a member of the Energy Counsel, Dennis Avery currently serves as Director, Center for Global Food Issues and is a Senior Fellow for the Hudson Institute is a non-partisan policy research organization dedicated to innovative research and analysis that promotes global security, prosperity, and freedom.

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Robert L. Bradley, Jr. is one of the nation’s leading experts on the history and regulation of energy and related sustainable development issues. He has presented professional testimony on energy issues to the California Energy Commission and United States Senate; his opinion-page editorials on energy policy have appeared in the New York Times and many other newspapers across the country; his energy views have been aired on National Public Radio, Voice of America, CBS Radio Network, and Armed Forces Radio, as well as local programs. Bradley is a multi-published author whose most widely read book is Energy: the Master Resource (with Richard Fulmer). His newest is Capitalism at Work: Business, Government and Energy. He holds a B.A. in economics, a masters in economics from the University of Houston, and a Ph.D. in political economy from International College. Bradley is a member of the International Association for Energy Economics, the American Economics Association, and the American Historical Association. He is CEO and founder of the Institute for Energy Research in Houston; visiting fellow of the Institute of Economic Affairs in London; an adjunct scholar of the Cato Institute; and a member of the academic review committee of the Institute for Humane Studies at George Mason University.

Paul Driessen’scareer has included staff tenures with the United States Senate, Department of the Interior and an energy trade association. He has spoken and written frequently on energy and environmental policy, global climate change, corporate social responsibility, and on marine life associated with oil platforms off the coasts of California and Louisiana. Driessen received his BA in geology and field ecology from Lawrence University, JD from the University of Denver College of Law, and accreditation in public relations from the Public Relations Society of America. A former member of the Sierra Club and Zero Population Growth, he abandoned their cause when he recognized that the environmental movement had become intolerant in its views, inflexible in its demands, unwilling to recognize our tremendous strides in protecting the environment, and insensitive to the needs of billions of people who lack the food, electricity, safe water, healthcare and other basic necessities that we take for granted. Driessen is a senior fellow with the Committee For A Constructive Tomorrow and Center for the Defense of Free Enterprise, nonprofit public policy institutes that focus on energy, the environment, economic development and international affairs.

Michael J. Economidesis among America's leading energy analysts who regularly appears on national TV and radio programs. As a consultant, educator, and PhD petroleum engineer, Economides has done technical and managerial work in more than 70 countries. A professor at the Cullen College of Engineering, University of Houston, Economides has written or co-written about 200 articles and peer-reviewed papers and 11 textbooks. Economides is the Editor-in-Chief for the Energy Tribunemagazine. He is also the co-author, with Ron Oligney, of the industry primer, The Color of Oil: The History, the Money and the Politics of the World's Biggest Business, which was published in 2000 and has since been translated into five languages. CARE is honored to include Michael Economides as a member of the Energy Counsel.

Michael R. Fox, Ph.D., is a retired nuclear scientist and university chemistry professor. He is the science and energy writer/reporter for the HawaiiReport.com. A resident of Kaneohe, Hawaii, he has nearly 40 years experience in the energy field. His interests and activities in the communications of science, energy, and the environment has led to several communications awards, hundreds of speeches, and many appearances on television and talk shows. Dr. Fox is listed by the Heartland Institute as a global warming/climate change expert. He is also the Senior Fellow for Science at the Grassroot Institute of Hawaii. He can be reached via email at mfox@grassrootinstitute.org. Please visit Dr. Mike Fox's blog at http://www.foxreport.org/.

Byron King is the resident energy and natural resource expert at Agora Financial, LLC. A geologist by training, he worked for the former Gulf Oil Company and has followed oil industry developments for over 30 years. Byron’s career path also took him into the U.S. Navy, both active duty and reserve. In the 1990s and 2000s Byron engaged in a vigorous private law practice. For the past five years Byron has been writing about energy and natural resource issues for an international audience. Currently, Byron writes and edits two major publications, Outstanding Investments and Energy and Scarcity Investor. Byron holds degrees from Harvard, the U.S. Naval War College and the University of Pittsburgh.

Tom Tanton is the Principal of T2 & Associates, a firm providing consulting services to the energy and technology industries. Mr. Tanton has over 35 years experience in the energy, economy, and environmental fields.